10-year Treasury yield briefly exceeds 3%

The 10-year Treasury bond yield briefly exceeded 3% on Friday, its first foray over the six-week threshold, with data showing that economic momentum has remained strong enough to keep the Federal Reserve at its steady pace.

The yield on 10-year treasury bills

TMUBMUSD10Y, + 0.62%

rose 3.4 basis points to 2.998%, after touching 3.00%, according to Tradeweb. The yield of the 2-year note

TMUBMUSD02Y, + 0.47%

increased by 2.5 basis points to 2.782%, its highest level since July 2008. Bond yield at age 30

TMUBMUSD30Y, + 0.63%

added 3.5 basis points to 3.136%. Bond prices move in the opposite direction of returns.

Investors faced a mixed batch of economic data. Retail sales rose 0.1% in August, below the 0.3% expected by economists surveyed by MarketWatch. In addition, import prices fell 0.6% in August. Investors may have to wait longer before domestic consumption degenerates into stronger inflationary pressures.

In contrast, the US economy has not lost its strength. Industrial production rose 0.4% in August, while the University of Michigan consumer sentiment index climbed to 100.8, the highest level since March and the second highest since January 2004.

"The data largely confirms our view that the Fed will continue to raise interest rates by 25 basis points once a quarter by the middle of next year, with the next increase expected later this month. "to Capital Economics.

The upward trend in trade tensions between the United States and China has weighed on the demand for safe haven securities, such as the US government document, according to information released earlier this week by some government officials. Trump. with Beijing. But Trump later said that there was no urgency to conclude a trade deal with China.

Meanwhile, an analysis by J. P. Morgan shows that more and more companies are beginning to highlight business risks in their calls for results. The latest edition of the Fed's Beige Book, a collection of anecdotes from companies across the country, shows that some companies have already brought their investment plans back into a context of growing uncertainty on the trade front.

"Concerns over the trade war with China seem to have boosted safe-haven flows to Treasuries, for example. This could likely happen again. But we doubt that this is enough to offset the upward pressure on monetary policy yields, especially with the Fed's fiscal stimulus and reduced balance sheet, which continue to increase supply in the background. " said Jones.

On the monetary policy front, Chicago Fed President Charles Evans said senior Fed officials had bypassed the consensus that the economic outlook was favorable.

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